On Tuesday, a $20 increase in global gold rates propelled local prices for 10 grams and one tola to new record highs, reaching Rs214,077 and Rs249,700, respectively. This surge, up Rs2,057 and Rs2,400 from Monday, coincided with international gold prices hitting an all-time high of $2,391 per ounce amidst heightened tensions following an Iranian attack on Israel.
The substantial rise in domestic gold prices may pose challenges for families planning to purchase jewelry sets and ornaments after Eidul Fitr, especially as the wedding season approaches after Ramadan. Market analysts are divided on whether individuals are turning to gold investment or exploring alternative investment options amidst fears of further price hikes due to geopolitical tensions.
Mohammad Sohail, Chief Executive of Topline Securities Ltd, noted that some Pakistanis are investing in gold and engaging in gold futures trading at the Pakistan Mercantile Exchange. Additionally, significant savings are being directed towards bank deposits and fixed-income funds, which are currently yielding close to 20%.
Meanwhile, Samiullah Tariq, Head of Research at Pak Kuwait Investment Company Ltd, highlighted real estate as a prominent investment avenue due to its historically higher returns.
Regarding wheat prices, significant wheat imports have led to a reduction in flour prices, with the price of flour no. 2.5 dropping to Rs104 per kg from Rs106 before Eidul Fitr and peaking at Rs124 per kg in February. However, retail prices for naan and chapati remain high, prompting calls for intervention to align them with the reduced flour rates.
Despite these reductions, retail prices for chakki flour, fine flour, and super fine flour continue to exceed expected levels, challenging the government’s market regulations. The Pakistan Flour Mills Association (PFMA) reports a decline in ex-mill rates for various flour types, attributed to the private sector’s import of wheat from Russia and Ukraine at lower international prices and the rupee’s appreciation.
